I am a Senior Political Contributor at Forbes and the official 'token lefty,' as the title of the page suggests. However, writing from the 'left of center' should not be confused with writing for the left as I often annoy progressives just as much as I upset conservative thinkers. In addition to the pages of Forbes.com, you can find me every Saturday morning on your TV arguing with my more conservative colleagues on "Forbes on Fox" on the Fox News Network and at various other times during the week serving as a liberal talking head on other Fox News and Fox Business Network shows. I also serve as a Democratic strategist with Mercury Public Affairs.

3/15/2012 @ 12:14PM15,515 views

Anti-Obamacare Forces Introduce Their Latest Effort To Mislead The Public

On Tuesday, the Congressional Budget Office released its 2012 estimate on the ten- year projected cost of the Affordable Care Act. Instantly, the anti-Obamacare crowd took to the airwaves and social media to proclaim that the numbers reveal the costs of the Affordable Care Act to be double what was promised when the law was passed.

Wow. That’s some scary stuff.

Good thing it is a complete and utter falsehood.

I suppose it should not come as a great surprise that the opponents of Obamacare would mobilize—given that the CBO report actually estimates a net decrease in the costs of health care reform totaling $51 billion when compared to last year’s estimates. The last thing those who oppose the law want is Candidate Obama running around the country talking about how the estimated cost of his landmark health care reform are actually going down.

Indeed, not only is the GOP pitch a gross distortion of the truth, this is one of those all too rare moments where I get to actually prove the meme to be nothing more than another effort to confuse Americans.

How?

By simply asking you to read the report. It’s easy. The CBO estimates are available in very readable English—not the government mumbo jumbo techno-speak you might expect. The report is short and to the point. You will not be confused.

The claim being peddled is that the estimated ten-year price tag of the law—initially projected to be about $900 billion to $1 trillion when the law was first passed—has exploded into a projected $1.7 trillion.

Jonathan Cohn offers a great explanation of what the numbers really mean -

To figure out the cost of health care reform, CBO looks at each of the law’s component parts and, for accounting purposes, groups them into different categories. It calls one category “gross cost of coverage expansions” – that’s the amount of money the federal government will spend to help people get insurance, mostly by offering Medicaid to more people or giving people subsidies they can use to help offset the cost of private insurance. Last year, CBO estimated that the gross cost of coverage expansion from 2012 through 2021 would be $1.445 trillion. Now CBO thinks the gross cost will be $1.496 trillion. The number shifted, in part, because the CBO has changed its projections for economic growth. But, in the context of such a large a budget projection, that’s barely any difference at all.

In the this latest estimate, CBO extends its projection out one more year, to capture the expenses from 2012 to 2022, in order to capture a full decade. In 2022, CBO says, the gross cost of coverage expansion will be $265 billion. Add that to the $1.496 and you get (with rounding) the $1.76 trillion – the one in the press releases and the Fox story.

But there is nothing new or surprising about this. It’s only slightly more money than the previous year’s outlays. The ten-year number seems to jump only because the time frame for the estimate has moved, dropping one year, 2011, and adding another, 2022. Obamacare has virtually no outlays in 2011, because the Medicaid expansion and subsidies don’t start up until 2014, which means the shifting time frame drops a year of no implementation and adds one of full implementation.

Even more amazing is that the opponents of Obamacare are completely ignoring the fact that when you include the money coming into the government bank accounts through the various charges included in the ACA, the estimates of the cost of the law are an improvement over last year’s projections.

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The original CBO estimate of $900b was phony, and everybody knew it. It is not fully loaded with fully implementd on-going costs or off-sets.

The fully loaded, fully implemented ACA net 10 year cost is around $1.69t according to Table 2 of the CBO’s March 2012 updated estimates. This uses their 2022 net cost x 10.

And given that no one can actually estimate costs 20 years out, and the government’s history of significantly under estimating program costs, my guess is that the true fully loaded, fully implemented 10 year net cost is probably more like $10t-$20t.

Hello to joining family of Euro zone like taxes as a percentage of GDP.

Interesting. While I’m used to Obama’s estimates being challenged as phony, I can’t actually recall someone suggesting that the CBO issued phony estimates. Good luck with that one. Further, all your second paragraph is doing is attempting to perpetuate the lie that is disproven by this piece. You have no interest in including the offsets or any of the other items on the plus side that produce the actual number. Good luck with this – the ditto heads will believe you because they want to. People who can actually think and READ the CBO report will know what’s real. Hopefully they will also begin to understand that when you must flat out lie to pursued, their just might be something askew with your argument.

Your reply is positively Catatonian. The Net Cost numbers I used were taken directly from the CBO re-estimate of March 12, Table 2. If you assume their 2022 net cost number is as close to a steady state number as we can get, run it out over ten years, you get the $1.69t number above.

Where did I go wrong?

Rick, as to the “phony” coment. As president of Marvel, if someone on your staff tried to sell you on an economic decision without showing you the fully loaded program with forecasts of steady state run rates and benefit/revenue streams, the irr/hurdle rate comparisons, the net present value including all sunk costs, you would have, or, your CFO would have thrown them out of the room for trying to intentionally mislead you.

The $900b was a political number, not a real number in an economic decision making sense. I dont think anybody was fooled then or now. And, as you know the CBO spreadsheets are only as good as the congressional inputs, assumptions, etc. as far as I know, they do not do truely independent analysis of data they gather from independent sources.

Governments have been historically and significantly wrong in estimating costs of social programs. Medicare program actuaries were off by a factor of ten. Obama is no different. He spun the numbers and got what he thought he could sell.

First of all, if you are looking at Table 2 of the March 12th report entitled, March2012 Estimate of the Budgetary Effects of the Insurance Coverage Provisions Contained in the Affordable Care Act”, you would see that the net costs are for 11years- not 10 as you suggest- and that the figure is $1,252,000,000. This is less than the estimate of 2011 by about $50 billion and not very far from the original 10 year estimate of the very first CBO report of $900 billion. Note that another year was added. So, it would seem that this is what you are missing. Now, when you say my reply is positively “Catatonian”, with a capital “C”, I am left to guess that you are referring to a cartoon I wrote and produced. That coupled with your knowledge of my background at Marvel leads me to wonder why it is you know so much about me? I mean, it’s kind of flattering -but its also kind of spooky. Have you also gotten my shoe size and the birthrates of my kids?

I think we are in violent agreement on the 11 year CBO net number for the period 2012-2021. The 10 year number I created uses the CBO annual net cost number from 2022 as a baseline, and runs it out 10 years. The reason I used the 2022 number is because it appears to be close to an all in, steady state, fully implented annual ACA net cost.

All I think I know about you is from wikipedia, and a youtube and some storyline synopses for Biker Mice from Mars. Also a fan of Marvel comics as a kid and kid at heart.

If you lived the same universe as I you would have gotten the part in the article that points out that the estimate is for 11 years. You are comparing it to 10 years,which included 2011 where there were virtually no dollars spent on Obamacare. In 2012, the program will be in full swing, so this just ain’t news- it’s just pretend news. And, yes, I am aware of what you find when googling me. But knowledge of a character in one of my animated show seemed pretty ‘deep’. Flattering – but ‘deep’.

It really is pretty clear, I think. It’s summed up completely on page 6 of the CBO report-

“Changes in the Major Components of the Insurance Coverage Estimates Because many of the changes discussed above were incorporated in the current estimates simultaneously, precisely quantifying the effects of each change is not possible. The combined effects of those changes over the 2012–2021 period are these: ■ An increase of $168 billion in projected outlays for Medicaid and CHIP; ■ A decrease of $97 billion in projected costs for exchange subsidies and related spending; ■ A decrease of $20 billion in the cost of tax credits for small employers; and ■ An additional $99 billion in net deficit reductions from penalty payments, the excise tax on high-premium insurance plans, and other effects on tax revenues and outlays—with most of those effects reflecting changes in revenues.”

While people can complain that by starting the ‘initial count’ in the year 2011, when there were no real expenditures, the first running 10 year numbers were a misdirection, and I appreciate that argument, it is just crystal clear that using the CBO report to suggest that the numbers are double the original estimate is just not true. Can we agree on that?

retinscoexec, the estimate was not phony at all since it’s what they estimated what the cost would be depending on certain factors and your math is wrong when it comes to the implementation. Do everyone a favor by calling the CBO to get the numbers instead of posting the usual hater BS where we know that you have not read the actual document and posting misinformation.

Anon, why don’t you stop using Google to stalk other individuals, who are smarter and more informed than you? And produce your questionable estimate of $3T step by step so that we could see if you are just as misinformed as retinscoexec.

retinscoexec, if I may point out… healthcare costs are subject to some of the highest inflation of any mainstream expense. If you were to adjust the estimates to account for inflation and population growth, you’d see that the cost is not only going down under Obamacare, but affordability is going up.

Obamacare itself is hardly of any expense to the taxpayer because its enforcement half requires very little staffing, and the service half (since the public option was muscled out of the bill) is also incredibly cheap. Compare that to the $550 billion in war-based discretionary spending that comes out of the taxpayer’s pocket every year.

Ian, back in early 2010, did you hear anyone from the Dem party stand up and say something like, “Just so we are clear, when the ACA is fully operational, and most people are finally insured, the annual net costs are going to be around $169 billion per year, year in, year out, adding $1.69 trillion to the deficit every 10 years”?

If they had said the truth, they would have also lost the Senate in 2010.

Rick says: “While I’m used to Obama’s estimates being challenged as phony, I can’t actually recall someone suggesting that the CBO issued phony estimates.” Rick, I am going to give you the benefit of the doubt and assume that you mean that the CBO did not INTENTIONALLY issue phony estimates. As you must know, CBO scores bills on the assumption that what Congress presents to it will occur (regardless of how likely or unlikely it is to happen in reality). In the case of Obamacare, the phony estimates are not the fault of CBO, but of dishonest politicians who fed CBO phony assumptions. There were plenty of real world observers who easily spotted the phony assumptions, and the phony estimates that necessarily followed.

This is from a piece that collected just a FEW of those phony assumptions and gimmicks that Pelosi and Reid concocted, starting with the slightly less than $1 trillion cost estimate for the first 10 years:

“For starters, that $1 trillion price is a low-ball estimate, covering only six – not ten – years of subsidies that don’t begin until 2014. The uninsured were clearly less of a priority than the deception of making the law look less expensive than it really is over its first decade.

Next up is the CLASS Act (for the Community Living Assistance Services and Supports Act) providing a new long-term care insurance entitlement. CLASS hitched a ride on the ACA for one reason only: premiums are collected in the first ten years, but no benefits are provided. Voila, it creates the perception of $70 billion in deficit reduction.

The deepest spending cuts in the ACA are in Medicare. Sadly, the ACA’s cuts are illusory. Medicare’s payments to health care providers would fall below those of Medicaid. About 15 percent of the nation’s hospitals would have to stop seeing Medicare patients in just a few years to stem their losses. The idea that Medicare could pay less than Medicaid is such sheer folly that Congress will rapidly reverse course. The truth is, these cuts cannot be relied upon to pay for anything.

So, even if CBO’s analysis were flawless, the authors of the ACA guaranteed a misleading bottom line. Their legislative prescriptions were written to create deficit reduction only on paper — not in reality.” http://online.wsj.com/article/SB10001424052748703954004576089702354292100.html?mod=WSJ_newsreel_opinion

I like fantasy and fiction as much as most people, but not when it comes to health care and a massive government program such as Obamacare.

I just love arguments like this. They seem to point up the short fall of reports and number crunching in general. If the data can not be provided in a format that allows others to construct and reconstruct, then the numbers and the conclusion being reported are a little less than stellar, and the arguments advanced by multiple people just fall on numb ears and minds. Why should we believe anyone, when we could know for ourselves? This is in a positive way the purpose of this article but I don’t think just reading the article does anything.

The report seems more remarkable for what it says about how healthcare coverage is being provided. It’s a mess, but I’m glad it’s on track, cost wise. All of us who are in to budgeting for upwards of 10 years or more, know how productive and accurate that can be.

More importantly, though, one can now understand the sly little smirk of sorts on the face of the author of this page, and if he can get me an original Silver Surfer poster, I’ll be sure to vote for him for President.

I just love arguments like this. They seem to point up the short fall of reports and number crunching in general. If the data can not be provided in a format that allows others to construct and reconstruct, then the numbers and the conclusion being reported are a little less than stellar, and the arguments advanced by multiple people just fall on numb ears and minds. Why should we believe anyone, when we could know for ourselves? This is in a positive way the purpose of this article but I don’t think just reading the article or perusing the references does it.

The report seems more remarkable for what it says about how healthcare coverage is being provided. It’s a mess, but I’m glad it’s on track, cost wise. All of us who are in to budgeting for upwards of 10 years or more, know how productive and accurate that can be.

More importantly, though, one can now understand the sly little smirk of sorts on the face of the author of this page, and if he can get me an original Silver Surfer poster, I’ll be sure to vote for him for President.